"If we look at progress that has been made so far on the foundry side of this venture and the CMOS image sensor business unit, we have made major steps forwards through the TowerJazz Panasonic deal. As was already mentioned last quarter, Panasonic, now TPSC, does have this worldwide leading CIS technology at 65 nanometer 300 millimeter wafers. This, combined with the reputation TowerJazz has in the image sensor business, allowed us to engage with several customers already on markets that were not accessible to TowerJazz until now such as very high-end cellphone camera markets and high-end digital SOI markets. We have prepared with our partners at TPSC, a foundry match PDK for 1.12-micron state of the art pixel technology and it’s now released to selected customers who already started their designs.

In parallel, we are preparing a unified CIS PDK that will be our mainstream PDK for the CIS 65 nanometer process and already includes 20% photomask reduction against the present flow. This process design kit is targeted for all pixels having dimensions larger than 1.35 micron for many types of applications, including obviously the digital SOI market. This design kit is going to be released to our customers by middle of next month and we have already many inquiries for data on this process for specific products by a variety of customers. Hence TowerJazz Panasonic Semiconductor Company allows us not only to increase our market share within our customer base by allowing them to get into new markets and applications, but also allows us to acquire new customers."

Russell Ellwanger says on the current state of the business:

"The CMOS image sensor business continues to grow in all fronts, namely high-end broadcasting and cinematography, industrial camera, medical x-ray sensors and gesture control. We see high demand for current products, higher than our forecast from the beginning of the year and an increase in new product tape outs. As we previously stated, we expect strong wafer based strong revenue growth starting Q4 this year and wrapping through 2015 in the gesture control application.

In our U.S aerospace and defense business unit, we continue to see revenue growth. In part this is due to increased R&D spending from our customers. An example was announced this quarter with a multimillion dollar award to TowerJazz from the US Air Force Research Laboratory towards a program directed at the manufacture of advanced read-out ICs which are used in many commercial and military sensors, detectors and imaging systems. We continue to build out more capacity and progress with our customer partner in our annex for the manufacture of commercial infrared sensors. We expect to see these turn to very strong wafer based revenue over the next years."